Exploring the Gig Economy and How It Impacts Employee Training
Amazon recently made what many view as an exciting announcement. The mega e-Commerce retailer is delving into what’s being dubbed the gig economy with a new delivery option. Amazon unveiled its program in Seattle, where independent contractors are becoming on-demand delivery people.
The service is called Amazon Flex, and much like Uber, people sign up for available shifts using an a mobile app.
Their job requires them to pick up purchased items, ordered as one-hour deliveries, and then to deliver them to people’s homes. Right now Amazon is paying drivers about $20 an hour.
“There is a tremendous population of people who want to work in an on-demand fashion,” said Dave Clark, senior vice president of worldwide operations. “This is another opportunity for people to work with the company.”
While the ultimate goal of Amazon Flex is to offer lower shipping costs and faster deliveries, it’s a unique way to do business in terms of employees. The idea of the gig economy is one that’s at the heart of quite a bit of discussion and even debate, particularly in Silicon Valley. Many people believe the gig economy offers employees a unique, flexible working environment and the opportunity to earn more money than they might even in full-time positions. On the other side of the argument are people who believe these employees should be entitled to benefits and full-time pay.
Some companies, including Uber and Postmates, are in the midst of lawsuits, with the debate being whether or not their contract employees deserve back pay and benefits.
The Uber Training Model
While Amazon Flex may be in its initial phases, Uber is a company that relies on the gig economy and has been doing so for several years.
It’s interesting to look at Uber through the lens of employee training and see how the gig economy compares to traditional employee training.
Last year Forbes featured an article about the Uber training program, or what many people say is a lack thereof.
Uber offers drivers the option to take a class that costs them, out of pocket, anywhere from $40 to $65. The class also takes about four hours to complete, which is four hours of unpaid time. Drivers aren’t required to take this course, and they can instead watch a 13-minute video on the use of the Uber app and then they’re ready to hit the road.
Uber often hosts onboarding sessions at local hotels, but drivers who’ve experienced these sessions say they’re little more than a time to hand out a few papers. Drivers are then turned loose to start picking up customers. This is troubling to some, particularly since Uber dubs itself the safest and most reliable way to get a ride.
The company does offer some optional videos that show drivers how to get good ratings from customers, but drivers have complained there isn’t training on things like resolving disputes or handling difficult passengers. Uber contractors say they really have no idea what to do in the event a passenger isn’t behaving well or becomes angry or even violent.
These topics are covered in the optional 4-hour class, and they are required for the experienced Uber Black drivers, but even then concepts are covered in a basic, topical way.
Lyft, which follows a similar concept to Uber, does say it requires an in-person onboarding mentorship.
While Uber is just one of many companies, particularly tech companies, embracing the gig economy, it elicits interesting questions about employee training.
The accusation coming from opponents of companies like Uber is that they’re skimping on employee training because they don’t want to cross the line from contractors to actual employees, meaning they’d also have to begin offering comparable pay and benefits. Contractors are defined by both the IRS and the federal government as being individuals that don’t require training. They have a specialized skill set or experience level that should allow them to start immediately working. Otherwise they may not fall under the contractor umbrella.
Third-Party Training and Resources
Some people see the lack of training in the gig economy as an opportunity to fill a void.
Featured on Fusion.net, Harry Campbell is the operator of TheRideShareGuy.com, which is a blog that seeks to provide resources, podcasts, blog posts and more for Uber and Lyft drivers. The site offers information on everything from basic driving tips, to how to make the most of your business. It also covers more specific topics such as whether or not it’s a good financial idea to do long-distance rides.
In California, there has been some talk that Uber and Lyft driver training should be similar to what taxi drivers are required to undergo, which includes a 28-hour course at an accredited facility. Companies have been fighting back against these suggestions, with Lyft saying this type of intensive training would be “arbitrary and burdensome.”
Training and the On-Demand Economy
We included some specific companies and how they’re approaching, or not approaching, contractor training.
It’s also valuable to look at the overall gig environment and larger training issues.
While there is a growing focus on training for companies who invest in full-time hires, this is quite the opposite for companies heavily relying on contractors or as-needed employees. In an effort to save money one of the most attractive things companies may see with the use of contract or gig employees is that they can cut down on training and development budgets.
Unfortunately, training is an imperative part of a long-term growth strategy.
In an interesting side note, there seems to be another unique correlation between employee training and side jobs. Many people seek side gigs as a supplement to their full-time positions so that they can learn new skills, which aren’t being provided by their employer.
The debate over training and development of gig employees is one that’s likely to continue and expand. Businesses are following the lead of Silicon Valley start-ups and putting more and more focus on contract employees, and they’re saying it doesn’t make good business sense to train these temporary people.
At the same time, pressure will likely continue to mount for Uber and other similar companies to change not only their training methods but their generalized talent management strategies.
Where do you stand on the issue of the gig economy as it pertains to employee training?